Perceptions of Ethics by Public and Private Sector Iranians

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org Asian Journal of Business and Management Sciences

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PERCEPTIONS OF ETHICS BY PUBLIC AND PRIVATE SECTOR IRANIANS
Bahaudin G. Mujtaba (Contact Person)

The H. Wayne Huizenga School of Business and Entrepreneurship Nova
Southeastern University
3301 College Avenue
Fort Lauderdale, Florida 33314. USA. E-mail:
mujtaba@nova.edu
Reza Tajaddini
School of Business, University of Otago, PO Box.
56, Dunedin, New Zealand
E-mail: reza.tajaddini@otago.ac.nz
Lisa Y. Chen
Department of Information Management, I-Shou University 1, Sec. 1
Syuecheng Road, Dashu Township,
Kaohsiung County 840, Taiwan.
E-mail address: lisachen@isu.edu.tw
ABSTRACT
Ethical maturity and perception of a country’s private and public sector

employees are important variables in the creation of an ethical business
environment. This research surveyed 448 Iranian citizens, public and private
sector employees, using the Personal Business Ethics Scores (PBES)
instrument. This study concludes that there are differences in the ethical
maturity levels of public and private sector employees. Those who are
employed by public agencies have higher PBES scores than respondents who
work in the private sector and those who are currently unemployed or are
students. There were statistically significant differences between public and
private sector subjects. Furthermore, having ethics training or a code of ethics
in the organization did not produce any significant differences.
Key Words: Ethics; public ethics; Iran; government; ethical maturity; and moral development.
INTRODUCTION
Ethical concerns, especially when related to corruption and bribery, are of concern to people of all cultures and
government officials. Iranian educators and governmental officials are also concerned about the perceptions of their
citizens regarding such dilemmas. Due to the economic recession and global competition, some firms and employees
have been taking the quickest and at times unethical means of getting increased sales and contracts, despite their
personal and organizational values. Getting rich through unethical means can create low morale and an ineffective
work environment. Ethical decision making is the process whereby individuals use their moral base to determine
whether a certain situation or issue
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is right or wrong and there is growing evidence indicating that unethical decisions often negatively affect the
financial performance of organizations (Clark and Leonard, 1998).
The job of leaders and managers is important in instilling strong ethics, morals, meaning, and, thus, motivation to
employees about their work in the organization (Mujtaba, Afza, and Habib, 2011; Mujtaba, Tajaddini, and Chen,
2011). Along with balancing corporate profitability and social responsibility in the daily decision makings, top
management must play a crucial role in shaping organizational members‟ ethical values by being models of
ethical behavior and showing that ethics are important (Minkes, 1999; Mujtaba, 2011). It is clear that “well-managed
companies operating in competitive markets are the key to wealth creation, the growth of jobs, rapid innovation and
the advance of knowledge” (Griffiths, 1996, p. 48). Motivated, engaged, and involved employees are usually
more productive, better committed, and demonstrate higher levels of energy toward their work. Giving meaning
to employees is important in every culture and workplace. Managers must be conscious of how to approach this
strategy in an ethical and culturally appropriate manner in accordance with the local norms.
Business leaders, government officials, and managers often emphasize the importance of cultural awareness and
sensitivity to local norms (Cavico and Mujtaba, 2008, 2009). Educators, human resources experts, and trainers
further emphasize legal and ethical values for adhering to policies, rules and procedures in order to remain law
abiding and socially responsible. These educators often define what is legal, moral, socially responsible, and
culturally acceptable in each country.
It is expected that working with government will be a factor in increasing the level of moral maturity of people, since
there are strict rules and regulations in almost all functioning and strong governments. For example, in a study by
Fryxell and Lo (2001), it was shown that managers in state-owned firms appear to embrace stronger
environmental ethical values over their private sector and joint venture counterparts. Svensson and Wood (2004)
also concluded that the codes of ethics in the public sector appear to be more nurturing, more developmental of
staff, less regulatory, and less directive than the private sector‟s. Further, Svensson and Wood (2004) claimed that
the public sector codes seem to be more positive in their approach and thus, the public sector organizations develop
a mutually beneficial relationship between themselves, their employees and the society in general. Wal et al.
(2008), explained that the values priority is considerably different between public and private sectors, which can
be an illumination factor for the differences in ethical perception of two sectors. According to Wal et al. (2008),
accountability (act willingly to justify and explain actions to the relevant stakeholders) is the most important
value in public sector followed by lawfulness, incorruptibility, expertise, reliability, effectiveness, and impartiality.
However, in private sector, usually higher emphasis is given to profitability, followed by accountability,
reliability, effectiveness, expertise, and efficiency.
On the other hand, there are studies on personal values of public and private sector employees which emphasize
similarities rather than differences among these two groups of employees (Lyons et al. 2006). As such, this study
discusses the findings of ethical perceptions from public and private sector employees, with a sample population in
Iran.
IRAN AND PUBLIC ETHICS
Ethics principles have deep roots in Iranian culture, history and religious beliefs. Iran, which was known as
Persia until 1935, is home to one of the world‟s oldest continuous major civilizations. Cyrus the Great (580-529
BC), the founder the Persian Empire, who presented himself as a liberator, declared the first Charter of Human
Right of nations in the world (Farrokh, 2007). Zoroastrianism, the ancient Persian religion and philosophy, rests on
three pillars: Good thoughts, Good Words, and Good Deeds. Moreover, plenty of Persian philosophers have used
Persian poetry, which usually contains a considerable emphasis on morality discussions, to convey their messages to
the people of diverse generations (Jafarey, 2010). In addition, some great Iranian scholars such as Avicenna (AD
981-1037) laid special emphasis on teaching and practicing medical ethics (Larijani and Zahedi, 2008).

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Nowadays, Islam is the dominant religion in Iran and this faith, in general, places a strong emphasis on justice,
harmony, and generosity in the workplace (Ali and Amirshahi, 2002).
Given the discussion above, it is expected that Iranian society has a high level of ethical standards; however, in
the latest issue of the Corruption Perceptions Index (CPI) in 2010, Iran scored 2.2, one of the poorest in the world
(Transparency International, 2010). CPI is designed to measure the perceived level of corruption in the public-
sector (Cavico and Mujtaba, 2011). Transparency International‟s CPI is a "survey of surveys," based on
business surveys conducted by at least thirteen different experts (Mujtaba, 2010). As can be seen from Table 1, the
Corruption Perception Index for Iran over the past four years are 2.2 (2010), 1.8 (2009), 2.3 (2008), and 2.9 (2005).
Iran‟s CPI scores have gone decreasingly lower over the past few years, except the last year which made a slight
improvement, and the country ranking have decreased from 87 in 2004 to 146 in 2010 (Transparency
International, 2010). In other words, the CPI surveys in Iran point to a higher level of perceived corruption in the
public sector. As such, political and business leaders should join together in removing such corrupt practices and
its perception.
Table 1 – CPI Scores (Rank) for Iran

Year Iran Iran
2010 2.2 146
2009 1.8 168
2008 2.3 141
2005 2.9 88
2004 2.9 87
The unfavorable ethical condition of today‟s Iranian society has been highlighted by other scholars as well. For
instance, Setayesh et al. (2007) found that over 90% of their respondents had adequate information about the
informal payment to physicians in Kerman, Iran and accepted this phenomenon in their society. One of the
explaining factors for the expansion of unethical behavior may be the growing rate of unemployment, inflation and
poverty in today‟s Iran (Tajaddini and Mujtaba, 2010).
The other factor might be the low attention of Iranian administration to promotion of public morality. A substantial
number of studies has illustrated that leaders can have a positive or negative effect on subordinate decision
making and morality perception, depending on whether the leader is perceived as ethical and trustworthy or
unethical and untrustworthy (Schwarz, 2001). Jones and Kavanagh (1996) found that subordinates reported
higher unethical behavior intentions when their supervisors were perceived as engaging in unethical behavior
and vice versa.
There have been some recent ethical scandals in Iran that senior government figures were supposedly involved.
The former interior minister of Iran was impeached by the Iranian Parliament after a doctorate he claimed to hold
turned out to be fraudulent. Or as another example, according to an investigation by Nature magazine, two
Iranian government ministers had co-authored peer reviewed papers that duplicated substantial amounts of text
from previously published articles. A scholarly scandal which “was a bitter blow to Iranian academic society”
said Ali Gorji, an Iranian neuroscientist based at the University of Münster in Germany (Butler, 2009). It was an
embarrassment for Iranian academic society which demonstrated the fastest rate of growth in scientific production of
any country in last 20 years (Science-Matrix, 2010). Thus a group of Iranian scholars lunched a blog called
Professors against Plagiarism to exonerate themselves from academic plagiarism and to increase the ethical
standards and sensitivity among Iranian academia (Professors Against Plagiarism, 2010).
The other factor that should be considered is the deification and perception of a nation from the ethical standards.
For example, in-group orientation is one of the distinguishing

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features of the Iranian culture, which suggests loyalty and cohesiveness towards small groups such as family and
close friends (Javidan and Dastmalchian, 2003). This influence of local culture on personnel practices, with its
focus on pre-existing relationships and nepotism that take precedence over skills and competencies, can be seen
especially in recruitment and selection, performance management, and compensation. This is a more common
and accepted practice in Iranian private sector. In the public sector, there are policies and formal channels;
however, with the right contact person, more flexibility is shown (Namazie and Frame, 2007). Generally, when
favoritism does not imply any bribe, it is not regarded as corruption in Iranian culture (Schramm-Nielsen and
Faradonbeh, 2002). Under some circumstances, favoritism may be regarded even as a positive or humane act
toward friends, family members, and acquaintances.
Before the 1979 revolution, Iran experienced a fast progress towards modernization. The ensuing Islamic
revolution overthrew a 2,500-year-old history of monarchy and replaced it with an Islamic Republic. This
revolution changed the entire structure of the country as well as that of the workforce. Some Iranians believe
that technocrats were replaced by ideologists, and an experienced workforce was replaced with a loyal workforce.
Therefore, competencies and management skills were not seen as a priority; rather, significance was paid to
putting loyal and ideologically sound employees into key management and strategic positions (Menashri, 2001).
In 1980, Iran faced a devastating eight-year war with Iraq. The economic sanctions from western countries also
put lots of pressure on the economy, and as a result, lower attention was paid to promotion of social values during
that era. After the war, Iranian government attempted to reconstruct the economy and also the social structure of
the country. Five economic development programs have been implemented and some emphasis has been placed
on the transition to a market economy (Hamdhaidari et al., 2008).
Movement toward the modernization also has some effects on the social structure of the country. Nowadays,
Iranian women participate in most fields of work and education (Karimi, 2008). Over 60 percent of university
entrances are among women in Iran and it is not difficult to find women in high managerial ranks. Although, there
are still difficulties, formal and informal job-segregation policies against participation of female Iranian
workforce in the job markets (Ahmad-Nia, 2002).
In recent years, Iran faces new obstacles. Its controversial nuclear program has led to the imposition of additional
economic sanctions by the UN Security Council and also some developed countries, which has had negative
impact on the economic conditions of country (Gholipour et al., 2010). Furthermore, Iran has been a volatile
society politically the last year or two after the controversial presidential election. All these create a special and
comaplicated circumstance in Iran which makes it fascinating to see how the ethical orientation of people has
been affected by these unique conditions. So this study tries to shed light on current ethical orientation of
Iranians. Therefore, the study for this article focused on the following hypotheses:
Hypothesis 1 – Iranians working in the private sector will have Personal Business Ethics Scores that are
equivalent to or greater than respondents who work in the private sector.
Hypothesis 2 – Iranians students will have Personal Business Ethics Scores that are equivalent to or greater
than respondents who are working either in the public or private sectors.
Hypothesis 3 – Iranians who are unemployed will have Personal Business Ethics Scores that are equivalent to
or greater than respondents who are working either in the public or private sectors.
Hypothesis 4 – Iranian males will have Personal Business Ethics Scores that are equivalent to or greater than
female respondents.

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Hypothesis 5 – Iranians who reported that their employers had a code of ethics will have Personal Business
Ethics Scores that are equivalent to or greater than respondents who said their employers did not have a code of
ethics.
Hypothesis 6 – Iranians who reported that they have had ethics training will have Personal Business Ethics
Scores that are equivalent to or greater than respondents who have not had any ethics training.
RESEARCH METHODOLOGY AND ANALYSIS
Researchers (Kohlberg (1984, 1972, 1969; Piaget, 1975, 1969; Clark, 1966) have concluded that as individuals
mature (grow older and acquire knowledge and experience); their ethical values and behaviors tend to improve. This
growth in the moral development of individuals takes place from early childhood until the late twenties and thirties
(Clark and Clark, 1966; Mujtaba et al., 2009). Moreover, social learning theory of Bandura (1986) provides a
theoretical basis for understanding how ethical leaders might influence followers.
This study uses Clark and Clark's (1966) instrument to compare the results of Personal Business Ethics Scores
(PBES) of respondents in Iran. The English version of the survey was translated by the first author, who is a
native speaker, into Persian (Farsi) and then it was given to three university professors who spoke both languages
fluently for checking the accuracy of the translated survey. Then the second and fourth authors back-translated the
Persian survey into English to see if the meaning had stated the same. The authors and their colleagues agreed
that the meaning of the survey has not changed in the Persian translated version.
Factor analysis: Before conducting a factor analysis, it is necessary to check sampling adequacy and
sphericity to determine whether if it is worth proceeding with the analysis. According to Kaiser (1974), KMO
(Kaiser-Meyer-Oklin) is used to test whether the variables in this study sample are adequate to correlate. A general
rule of thumb is that a KMO value should be greater than 0.5 for satisfactory factor analysis to proceed. For this
study, KMO is 0.823 (significance, 0.0001) for business ethics; therefore, one can proceed with factor analysis.
In addition, the factor loadings after rotation are greater than 0.4, it is not necessary to remove any of the
measured response questions. For the reliability test, each item had a corrected item-to-total correlation that are
greater than 0.4 and Cronbach‟s coefficient alpha are greater than 0.7 (Nunnally, 1978).
Population demographics: This study targeted Iranian public and private sector employees and
managers. The surveys were sent to Iranians in the following cities: Tehran, Karaj and Kerman. Tehran, which is
the capital and the largest city of the country, is the most important economic center and populated city of Iran.
Karaj is an industrial city located nearly 20 km west of Tehran. Kerman is the center of the largest province of Iran.
A paragraph explaining the purpose of this research and guaranteeing total confidentiality was included with
each survey. At the end of the questionnaire some blank space was provided for the respondents‟ comments. For
this study, 800 questionnaires were sent to candidates. Out of 800 distributed surveys, a total of 448 surveys,
comprising a response rate of 58%, were returned. From the returned surveys, a total of 15 surveys were
incomplete and could not be used. Of the subjects, 228 (50.9%) are female respondents and the rest are males. The
authors would like to proactively acknowledge that the sample collected is very small for a big country like Iran
that has such a rich and diverse history. Therefore, this analysis can be seen as an initial pilot study where the
conclusions and generalizations are mainly indicative of responses for those included in the sample, and not
necessarily as a representative of an entire country or the culture in Iran.
The Personal Business Ethics Scores (PBES) questionnaire consists of eleven questions which represents a score
between 11, indicating low personal business ethics, to 55, indicating very high personal business ethics. An
analysis of variance (ANOVA) at the

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p<0.05 level of significance is used to determine if there are differences in the responses of people based on age,
education, management experience, and government work experience. The .05 level of significance has been chosen
because it is an appropriate level of significance for most social science research. This study used the SPSS
software as a database and used the ANOVA section to evaluate the hypothesis at the specified level (5%) of
significance.
As can be seen from the frequency table (Table 2), there were sufficient number of respondents from the public
sector (n=193) and private (n=151) employers for analysis. A small number of the respondents (43) were
unemployed. While 220 respondents were males, 228 are females. Of the total respondents, 202 reported having
had an ethics course in their educational background. However, only 140 reported having had formal training
workshops about ethics through their employers or departments with a government agency.
Table 2 – Demographics and Frequency Tables

a. Sector
Valid
Frequency Percent Cumulative Percent
Percent
Valid 1= Private sector 151 33.7 33.7 33.7
Unemployed 43 9.6 9.6 43.3
Public sector 193 43.1 43.1 86.4
Student 61 13.6 13.6 100.0
Total 448 100.0 100.0
b. Gender
Frequency Percent Valid Percent Cumulative Percent
Valid Male 220 49.1 49.1 49.1
Female 228 50.9 50.9 100.0
Total 448 100.0 100.0
Employee Status
Valid Less than one year 45 10.0 10.0 10.0
1-5 years 129 28.8 28.8 38.8
6-15 years 106 23.7 23.7 62.5
16-30 years 73 16.3 16.3 78.8
30 or more years 18 4.0 4.0 82.8
Currently unemployed 77 17.2 17.2 100.0
Total 448 100.0 100.0
c. Taken an Ethics or Business Ethics Course

Valid Yes 202 45.1 45.1 45.1
No 246 54.9 54.9 100.0
Total 448 100.0 100.0
d. Business Code
Valid Yes 233 52.0 52.0 52.0
No 215 48.0 48.0 100.0
Total 448 100.0 100.0

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e. ETHICS TRAINING
Valid Yes 140 31.3 31.3 31.3
No 308 68.8 68.8 100.0
Total 448 100.0 100.0
Hypotheses testing and analysis. The following paragraphs and explanations are geared toward each
hypothesis and its explanation.
Table 3 – Analysis of Employees and Students and the Unemployed

One-Way ANOVA
95% Confidence Interval
for Mean
Std. Lower Upper
N Mean Deviation Std. Error Bound Bound Minimum Maximum
Private
sector 151 3.60 .558 .045 3.51 3.69 2 5
Unemployed 43 3.76 .503 .077 3.61 3.92 3 5
Public
sector 193 3.83 .581 .042 3.75 3.91 2 5
Student 61 3.64 .672 .086 3.46 3.81 2 5
Total 448 3.72 .587 .028 3.67 3.78 2 5
Sum of Squares df Mean Square F Sig.

Between Groups 4.829 3 1.610 4.790 .003
Within Groups 149.202 444 .336
Total 154.031 447
95% Confidence Interval

Mean Difference
(I) SECTOR (J) SECTOR (I-J) Std. Error Sig. Lower Bound Upper Bound
Private sector Unemployed -.16 .100 .712 -.42 .11
Public sector -.23(*) .063 .002 -.39 -.06
Student -.03 .088 1.000 -.26 .20
Unemployed Private sector .16 .100 .712 -.11 .42
Public sector -.07 .098 1.000 -.33 .19
Student .12 .115 1.000 -.18 .43
Public sector Private sector .23(*) .063 .002 .06 .39
Unemployed .07 .098 1.000 -.19 .33
Student .19 .085 .143 -.03 .42
Student Private sector .03 .088 1.000 -.20 .26
Unemployed -.12 .115 1.000 -.43 .18
Public sector -.19 .085 .143 -.42 .03
* The mean difference is significant at the .05 level.
The results for hypothesis 1, 2, and 3 are presented in Table 3. For hypothesis 1, result of one-way ANOVA show
that there were significant differences in personal business ethics (F=4.790, p<.05) between public and private
sectors. In addition, the difference between the private sector and the public sector reach the significance level
(MD=-.23, p<.05) and the mean of public sector (3.83±.581) is higher than the mean of private sector
(3.60±.558). However, the difference between students and the public and private sectors do not reach the
significance level. Also, the difference between the unemployed and the public or private sectors do not reach
the significance level.
Regarding the differences in the PBES scores of Iranian male and female respondents, result of t-test showed that
there were no significant difference in personal business ethics (male=3.67±.614; female=3.77±.558; t446= -1.647,
p=.100) between them. As equal variances assumed by a Levine‟s test (F=3.216, p>0.05), but the difference between
two groups did

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not reach the significance level although female respondents have higher mean score than male respondents.
Table 4 – Analysis for Male and Female Iranians

Independent Samples T-Test
GENDER N Mean Std. Deviation Std. Error Mean
ETHICS Male 220 3.67 .614 .041
Female 228 3.77 .558 .037
Levene's Test
for Equality of
Variances t-test for Equality of Means
95% Confidence
Interval of the
Difference
Sig. (2- Mean Std. Error
F Sig. t df tailed) Difference Difference Lower Upper
ETHICS Equal
variances 3.216 .074 -1.647 446 .100 -.09 .055 -.200 .018
assumed
Equal
variances
-1.644 438.397 .101 -.09 .055 -.200 .018
not
assumed
Regarding the hypothesis about the Iranians who reported that their employers had a code of ethics having PBES
scores that are equivalent to or greater than respondents who said their employers did not have a code of ethics, the
result of t-test showed that there were no significant differences in personal business ethics (with code of
ethics=3.75±.586; without=3.69±.588; t446= .991, p=.322) between employers that had a code of ethics and
employers that did not have a code of ethics. When equal variances are assumed by a Levine‟s test (F=.334,
p>0.05), the difference between two groups did not reach the significance level although respondents‟ with
employers who had a code of ethics have higher mean score than respondents‟ whose employers did not have a
code of ethics.
Table 5 – Analysis for Employers and Codes of Ethics

CODE N Mean Std. Deviation Std. Error Mean
ETHICS Yes 233 3.75 .586 .038
No 215 3.69 .588 .040
Levene's Test
for Equality of
95% Confidence
Interval of the
Difference
ETHICS Equal
variances .334 .564 .991 446 .322 .05 .056 -.054 .164
assumed
Equal
variances
.990 442.857 .322 .05 .056 -.054 .164
not
assumed

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The last hypothesis stated that “Iranians who reported that they have had ethics training will have Personal
Business Ethics Scores that are equivalent to or greater than respondents who have not had any ethics training,”
and the result of t-test showed that there were no statistically significant differences in personal business ethics
(ethics training=3.79±.591; without ethics training=3.69±.583; t 446= 1.756, p=.080) between those who had ethics
training and those who did not have ethics training. When equal variances are assumed by a Levine‟s test (F=.954,
p>0.05), the difference between two groups did not reach the significance level although respondents who had ethics
training have higher mean score than respondents who did not have ethics training.
Table 6 – Analysis for Iranians who had Ethics Training

ETHICS_T N Mean Std. Deviation Std. Error Mean
ETHICS Yes 140 3.79 .591 .050
No 308 3.69 .583 .033
Levene's Test
for Equality of
95% Confidence
Interval of the
Difference
ETHICS Equal
variances .954 .329 1.756 446 .080 .10 .060 -.012 .222
assumed
Equal
variances
1.748 265.851 .082 .10 .060 -.013 .223
not
assumed
As presented in Table 7, this study concludes that government work experience is a significantly positive factor
in business ethical maturity or moral development. However, this study demonstrated that gender, having an ethics
code in the company, ethics training, being a student, and being unemployed are not statistically significant factors
in the moral development of individuals. It should be noted that those respondents employed by a company that
did have an ethics code did have a slightly higher ethical maturity (PBES) score. It should further be noted that
those respondents who reported having had formal ethics training also had slightly higher ethical maturity
(PBES) score.
Table 7 - Summary Results of the Hypothesis

Hypothesis Statement Outcome
H1 – Iranians working in the private sector will have Personal Business Ethics Scores Significant differences
that are equivalent to or greater than respondents who work in the private sector. found
H2 – Iranians students will have Personal Business Ethics Scores that are equivalent No significant
to or greater than respondents who are working either in the public or private sectors. differences found
H3 – Iranians who are unemployed will have Personal Business Ethics Scores that No significant
are equivalent to or greater than respondents who are working either in the public or differences found
private sectors.
H4 – Iranian males will have Personal Business Ethics Scores that are equivalent to No significant
or greater than female respondents. differences found
H5 – Iranians who reported that their employers had a code of ethics will have No significant
Personal Business Ethics Scores that are equivalent to or greater than respondents differences found
who said their employers did not have a code of ethics.
H6 – Iranians who reported that they have had ethics training will have Personal No significant
Business Ethics Scores that are equivalent to or greater than respondents who have differences found
not had any ethics training.

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DISCUSSION AND IMPLICATIONS
Ethics is the study of right and wrong, as well as all the gray areas between them. The PBES instrument
determines one‟s commitment level of personal integrity and honesty in business dealings and in the observance
of the laws governing business. In this study, using the PBES instrument, Iranian respondents with government
work experience show significantly higher business ethics score; this finding supports the findings of Fryxell and
Lo (2001). The Iranian respondents employed by firms with a code of ethics had a slightly higher ethical maturity
score; this finding supports Svensson and Wood (2004) findings which concluded that more robust codes of
ethics in government agencies may be the reason for the higher ethical scores of public sector personnel. The
codes of ethics in the public sector encourage the focus on the right things to be done by employees, in contrast to
the private sector‟s one that puts emphasis on not doing the wrong thing by employees. Actually, according to
Frederickson (2005), “the private market is designed to be efficient but not to be fair; democratic self-government is
designed to at least try to be fair, and hope to be efficient” (p. 178). In other words, there is a clear distinction between
the public sector ethos “guardian moral syndrome” and the private sector ethos “commercial moral syndrome”
(Jacob, 1992). The fact that the public sector is judged by the service imperative rather than financial imperatives and
moreover, encouragement of its employees to embrace the ideals of the organization and also to contribute to the
betterment of the society, may help to explain why respondents with longer connection with this kind of
environment achieved better ethical scores in this survey.
Moreover, Bowen (2008) explained that stakeholders and the general publics are the groups on which the
organization must depend for its survival. Thus careful attention to ethical actions improve the reputation of the
organization as credible, reliable and ethical which leads to the creation of public trust and greater profit as well.
It is also worth to mention that, human beings are not necessarily moral creatures from the birth naturally, they
should be trained morally. Defining and placing ethical culture and rules in public and organizations, helping
employees to behave appropriately according to these rules, and removing the situations that are damaging
justice, honesty and transparency would increase societies‟ confidence to the public administration (Ugurlu,
2009).
Organizational factors play a critical role in shaping responsible behavior on the job. Unethical conduct can be
encouraged by rewarding actions that violate ethical standards (Sims and Blinkmann, 2002). Encouragement and
reward systems drive ethical behavior and when accompanied by leaders‟ real commitment to ethics and ethics
infrastructures, they may insulate an organization from significant exposure to ethical dilemmas (Mitchell et al.,
2005). Therefore, it is recommended that Iranian private sector companies put more effort into improvement of
their organizational cultures and as a result increase their reputation, productivity and profits.
To achieve this goal, three organizational conditions must be presented: awareness of formal organizational
goals and corresponding informal norms, suitable decision making procedures and corresponding informal
norms, and sufficient distribution of resource (McDonald and Nijhof, 1999). It is also advisable that employees
have the necessary skills and personal intentions for ethical behavior prior to gaining employment in the organization
(Ferrell and Gresham, 1985).
As the other outcome, this study cannot find a significant difference between personal business ethics of
Iranians who reported that their employers had a code of ethics and those who did not, although those who
worked in places with codes of ethics showed a slightly higher mean score. These results are supported by Ford,
Gray and Landrum (1982), who reported minimal effects of corporate codes of conduct on employees‟ behavior,
and also Clark and Leonard (1998) who found codes of ethics were not influential in determining a person‟s ethical
decision making behavior.
In this study no considerable difference is found between personal business ethics of Iranian male and female
respondents. Although as was expected, females had higher mean

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score in this regard. These results are similar to Wal and Huberts‟ (2008) findings which outlined that gender
does not have a significant influence on personal moral preferences.
However, surprisingly, there is no substantial difference in business ethic perception of those who had gone
through ethics training and those who had not. There may be different reasons for this outcome and one of them may
be rooted in poor quality of ethical programs offered in Iran. On the other hand, not giving appropriate attention to
business ethical programs in Iranian organizations by top managements may be one of the other explainable factors.
This lack of attention may reduce the effectiveness of ethics training programs as participants face contradictory
behaviors in their environment and the salaries they receive.
The ethical orientation of the leader, in terms of specific behaviors and traits, is a key factor in promoting ethical
behavior in an organization, and in broad terms, in a country (Posner and Schmidt, 1992). Respect of leadership to
ethical values has a positive impact on the work environment or society and provides a role model for others. It
was proved that in companies where senior managers and supervisors demonstrate ethical leadership, employees
are less likely to observe unethical conduct and are more likely to seek advice when faced with ethical dilemmas
(Trevino, Weaver, Gibson and Toffler 1999). This issue has come up several times in the comments made by our
respondents as well. For example, the following are a sample of comments made by these Iranians:
 I assume most of troubles we are facing today are the outcome of wrong decisions which are taken
by the high ranked managers and our government.
 All managers just think about higher profits and being ahead of their competitors. I think majority
of Iranian managers do the same. It definitely will affect the morality of their subordinates and the
ethical values of their organizations.
 Business ethics are themselves parts of social conventions and social conventions are directly
affected by the political and social values and principles of a country. To improve business ethics,
political and social beliefs of our nation should be promoted.
There were other issues which mentioned by some of the respondents. For example, the importance of
transparency in an organization or attention to the religious values:
 Transparency among different levels of an organization is a vital element for increasing morality. When
all personnel are contributing in the process of decision making, they will have better perspective about
their organization‟s long term goals and it may be helpful to stop them from putting their own wills first.
 We should believe in God and follow His orders. It will prevent committing to unacceptable actions.
Forming ethical principles concept is turning into an essential situation in the world day by day. In many countries,
ethics boards in different fields are being established (Thoms, 2008). Thus, it is advisable to Iranian authorities
and top managers to pay more attention to their own ethical conducts and attempt to promote ethical values among
themselves and their surroundings as well. This is important since the long-term survival of each human based
community depends on ethical leadership of that community (Kanungo and Mendonca, 1996).
LIMITATIONS AND RECOMMENDATION FOR FUTURE RESEARCH
There are several limitations to this study and one of them is the fact that this study was conducted with a
convenient general sample population, and convenience samples are always suspect in generalizing to a larger
population. Future studies can compare specific populations in different parts of the country with similar working
backgrounds and demographic variables. It is acknowledged that the convenient sample collected by the

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authors without any funding is small for a big country like Iran which is very diverse and widespread. The
authors would like to emphasize that this is rather an initial pilot study, not necessarily representative of an entire
country or the culture in Iran since Iranians have years of history and socialization among different people groups
living there.
It is important to recognize that research and data gathering remain challenging in Iran; this was just as true for
this research as well, specifically with consideration of controversies around the topic. Most Iranian organizations
are sensitive to permitting any interviews and are wary towards research on ethical perceptions. Therefore, even
though survey participants were promised confidentiality and told that their answers would be anonymous, the
possibility exists that opponent behavior against the survey might have been underreported by the respondents.
In this survey, the self-reporting techniques were used, which may be biased. Furthermore, the values might be
different across national cultures. Therefore, it would be meaningful to investigate the relation between ethical
maturity and the examined variables among other Middle Eastern cultures as well as countries around the world
from a comparative perspective. In addition, future researchers can consider demonstrating cross-cultural
equivalence of measures prior to cultural conclusions being made.
CONCLUSION
This research was designed to compare the Personal Business Ethics Scores (PBES) of Iranians who work in the
public and private sectors. The purpose was to determine whether work experience, in each sector, is related to ethical
decision making of Iranians. It appears that public sector employees in Iran have a significantly higher level of
ethical maturity.
The outcomes demonstrate that public sector work experience is a factor in the level of ethical maturity, as
government work experience can enhance a person‟s moral maturity or business ethics scores. This study cannot
find a significant difference between ethical perception of Iranian males and females and also those who have
participated in ethics training programs and those who have not. No difference in PBES scores is reported
between those who work in places with ethics codes and those who work in places that do not have a formal code of
ethics. Recommendations are made for Iranian executives and top managements to be role models of high character
standards and to pay more attention to the promotion of ethical values in the national and social levels.
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AUTHOR BIOGRAPHY
Bahaudin G. Mujtaba, D.B.A., is Professor of Management and Human Resources at Nova Southeastern
University‟s H. Wayne Huizenga School of Business and Entrepreneurship. Bahaudin has served as manager,
trainer, and management development specialist in the corporate world as well as a director, department chair and
faculty member in academia. His areas of research are ethics, assessment, training, and diversity management.
Bahaudin can be reached through email at: mujtaba@nova.edu
Reza Tajaddini is a M.B.A. holder and a Ph.D. candidate at School of Business, University of Otago, New
Zealand. His area of research interests are Cross-Cultural Management studies, International Finance and
International Business. His research appears in scholarly journals such as: Public Organization Review, Chinese
Business Review and American Journal of Accounting and Finance. Reza can be reached through email at:
reza.tajaddini@otago.ac.nz
Lisa Y. Chen, D.I.B.A., currently serves as chief of public relations section and an assistant professor of
Information Management at College of Electrical and Information Engineering of I-Shou University. Her academic
background includes a Doctorate in Business Administration with a major focus on management and a minor
focus on information technology management. She has more than 10 years industry experience as product
marketing specialist, financial supervisor, and business manager. Her research interest lies in international
management, Internet marketing, information technology, and fuzzy decision making. Lisa can be reached
through email at: lisachen@isu.edu.tw

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org Asian Journal of Business and Management Sciences

PERCEPTIONS OF ETHICS BY PUBLIC AND PRIVATE SECTOR IRANIANS

Bahaudin G. Mujtaba (Contact Person)

Ethical maturity and perception of a country’s private and public sector

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IRAN AND PUBLIC ETHICS

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Table 1 – CPI Scores (Rank) for Iran

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RESEARCH METHODOLOGY AND ANALYSIS

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Table 2 – Demographics and Frequency Tables

c. Taken an Ethics or Business Ethics Course

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Table 3 – Analysis of Employees and Students and the Unemployed

Sum of Squares df Mean Square F Sig.

95% Confidence Interval

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Table 4 – Analysis for Male and Female Iranians

Table 5 – Analysis for Employers and Codes of Ethics

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Table 6 – Analysis for Iranians who had Ethics Training

Independent Samples T-Test

Table 7 - Summary Results of the Hypothesis

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DISCUSSION AND IMPLICATIONS

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LIMITATIONS AND RECOMMENDATION FOR FUTURE RESEARCH

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